Meredith Whitney’s has been banging this drum for a while, warning that the economy will really suffer once banks pull consumer credit card lines.
Her numbers are pretty stark. She says that of the more than $5 trillion in outstanding credit card lines, $500 billion was pulled just in Q4, and that by the end of 2010, more than $2.7 trillion will be yanked out of the system.
(Importantly, Whitney is talking about credit lines, not actual credit. On the $5 trillion, $800 billion is currently drawn down.)
Whitney thinks government should try to head off this mess, but it’s not clear what she thinks can be done. The fact remains that we’re drowning in debt, and the only obvious solution is to dig ourselves out.
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